In declining to award solicitor-client Costs and instead awarding Costs of 50% of the Respondent’s reasonable legal fees and disbursements, Neufeld J. reviewed the general costs principles.

Citing Stewart Estate v TAQA North Ltd, 2016 ABCA 144, Neufeld J. noted that the award of costs is fundamentally a matter of discretion for the Court. Such discretion must be exercised judicially, with due regard for case precedent and the Rules.

Solicitor-client costs are the exception, rather than the norm. Partial indemnity provides the successful party with some contribution towards its legal fees and disbursements while ensuring that costs liability does not create unacceptable barriers to justice for litigants generally.

Neufeld J. cited Lay v Lay, 2024 ABCA 26 for the proposition that solicitor-client costs are generally awarded where the conduct of the unsuccessful litigant is so blameworthy that they should be required to pay the legal fees and disbursements of both sides. Examples of such conduct include litigation misconduct, and fraudulent pre-trial conduct.

Short of full indemnity solicitor-client costs, it is open to the Court to award partial indemnity costs. When cost recovery is set at a proportion of legal fees, an evaluation of reasonableness having regard to the factors articulated in Rule 10.2 is necessary. Costs Applicants are expected to provide a Bill of Costs calculated under schedule C. The Trial Judge or an Assessment officer must conduct a detailed analysis of reasonableness.